Reserves will increase by $10bn by March end: Govt

Islamabad: Pakistan’s foreign reserves are decreasing to very lower levels of $7.6 billion, the federal government planned to increase the reserves to $10 billion by the end of next month, which is likely to be unrealistic as there are no foreign inflows.

According to figures released by State Bank of Pakistan (SBP) on Thursday, the country’s total liquid reserves stood at $7.59 billion as of February 7, the lowest level in years. Out of the total reserves, the foreign currency reserves held by SBP dropped to $2.841 billion, the central bank said. Reserves held by commercial banks stood at $4.748 billion, according to the SBP.

Net official reserves have turned out to be negative, if the government’s liabilities on account of China currency swap, forward contracts and China deposits are subtracted from the reserves held by the SBP.

The $2.84 billion reserves are sufficient to finance only three weeks of imports, as the country’s monthly import bill rose to $4.2 billion in January.

Dar gave instructions to accelerate the pace of efforts already being made by the Finance Division to improve the reserves position, it added.

The handout stated that the foreign exchange reserves will be increased to more than $10 billion by the end of March, 2014. It further added that the gross reserves will be increased to $16 billion by the end of December, 2014.

The government was betting on a plan to shore up its reserves by floating Euro bonds next month, the officials added. They said the government would soon launch road shows to gauge the market appetite before issuing the bond next month.